The rise of the cryptocurrencies has been impressive to watch. Cryptocurrencies became a buzzword among financial specialist, bloggers, and major news sites, for good reason.
The all-star of the group, Bitcoin, gained unprecedented value and popularity throughout the year of 2017. Starting at around $800 early this year, the cryptocurrency's price soared to $10,000 by late fall, topping off at near $20,000 by December, and is now floating around $16,000. Bitcoin is not the only star, other digital currencies like Ethereum, Litecoin, and Monero have all gained steam. With all this growth among the digital currencies, major financial institutions, governments, and exchanges have struggled to find what role the cryptocurrencies will play in the financial system. While some have praised the rise of the digital currencies, others have dismissed the currencies as a bubble on the verge of popping.
The Israel Securities Authority has seemed to take a hard line towards cryptocurrencies because of their volatility. In short, the ISA aims to ban cryptocurrencies from the Isreal Stock Exchange.
No Place For Cryptocurrencies
This week the Israel Securities Authority stated that they intended to ban new listings and existing cryptocurrency businesses on the Tel Aviv Stock Exchange (TASE). At the Calcalist business conference, hosted in New York, chairman of the Israel Securities Authority, Shmuel Hauser, announced that he would be putting together a proposal as early as next, that would initiate the ban on the crypto firms. Basically, companies who have cryptocurrencies as their main source of business will not be allowed on the TASE.
Hauser did not specifically mention any companies that will be a part of the ban. Nevertheless, there have already been two major companies that have been identified as businesses that heavily rely on the digital currencies or the technology behind them.
Fantasy Networks and the natural resource company turned Bitcoin mining company, Blockchain Mining, had stock prices fall after the announcement: both companies falling under the set rules of the upcoming ban. Though it is sure to "harm investment in the companies", Hauser has made his stance clear on the crypto-firms.
The aim of his ban is to protect investors. Most investors and institutions do not know what place cryptocurrencies play in the financial system because of the unpredictability of the currencies. Some would even argue that cryptocurrencies may not even be around in a few years.
Hauser seems to share a similar opinion, “We feel that the prices of bitcoin behave like bubbles and we don’t want investors to be subject to that volatility and uncertainty,” says Hauser. “There is an importance to signal to the market where things are… Investors should know where we stand.”
What role will cryptocurrencies play in our future financial system?